Graham Barclay Oysters Pty Ltd v Ryan
[2002] HCA 54
•5 December 2002
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ
GRAHAM BARCLAY OYSTERS PTY APPELLANTS
LIMITED & ANORAND
GRANT RYAN AND ORS RESPONDENTS
Graham Barclay Oysters Pty Ltd v Ryan
[2002] HCA 54
5 December 2002
S258/2001ORDER
1. Appeal by Graham Barclay Oysters Pty Ltd allowed in so far as it concerns the issue of negligence.
2. Appeal by Graham Barclay Distributors Pty Ltd allowed with costs.
3. Parties to have 28 days to file draft minutes of consequential orders to be made by this Court in respect of the orders (including costs orders) made by the Full Court of the Federal Court.
4. In default of agreement between the parties to this appeal as to the form of the draft minutes for that appeal, each party is to file within the 28 day period its draft with short written submissions in support, indicating how the drafts of the parties differ.
On appeal from the Federal Court of Australia
Representation:
C R R Hoeben SC with A P Coleman for the appellants (instructed by PricewaterhouseCoopers Legal)
T K Tobin QC with J B R Beach QC and B M Zipser for the first named first respondent (instructed by Slater & Gordon)
No appearance for the second to seventh named first respondents
W H Nicholas QC with T G R Parker for the second respondent (instructed
by Coudert Brothers)B W Walker SC with P W Taylor SC and M J Windsor for the third respondent (instructed by Crown Solicitor for the State of New South Wales)
Intervener:
R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ
GRANT RYAN APPELLANT
AND
GREAT LAKES COUNCIL AND ORS RESPONDENTS
Ryan v Great Lakes Council
5 December 2002
S259/2001ORDER
1. Appeal dismissed with costs.
2. Parties to have 28 days to file draft minutes of consequential orders to be made by this Court in respect of the orders (including costs orders) made by the Full Court of the Federal Court.
3. In default of agreement between the parties to this appeal as to the form of the draft minutes for that appeal, each party is to file within the 28 day period its draft with short written submissions in support, indicating how the drafts of the parties differ.
On appeal from the Federal Court of Australia
Representation:
T K Tobin QC with J B R Beach QC and B M Zipser for the appellant (instructed by Slater & Gordon)
W H Nicholas QC and T G R Parker for the first respondent (instructed by Coudert Brothers)
C R R Hoeben SC with A P Coleman for the second and third respondents (instructed by PricewaterhouseCoopers Legal)
B W Walker SC with P W Taylor SC and M J Windsor for the fourth respondent (instructed by Crown Solicitor for the State of New South Wales)Intervener:
R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ
STATE OF NEW SOUTH WALES APPELLANT
AND
GRANT RYAN AND ORS RESPONDENTS
State of New South Wales v Ryan
5 December 2002
S261/2001ORDER
1. Appeal allowed with costs.
2. Parties to have 28 days to file draft minutes of consequential orders to be made by this Court in respect of the orders (including costs orders) made by the Full Court of the Federal Court.
3. In default of agreement between the parties to this appeal as to the form of the draft minutes for that appeal, each party is to file within the 28 day period its draft with short written submissions in support, indicating how the drafts of the parties differ.
On appeal from the Federal Court of Australia
Representation:
B W Walker SC with P W Taylor SC and M J Windsor for the appellant (instructed by the Crown Solicitor for the State of New South Wales)
T K Tobin QC with J B R Beach QC and B M Zipser for the first named first respondent (instructed by Slater & Gordon)
No appearance for the second to seventh named first respondents
W H Nicholas QC with T G R Parker for the second respondent (instructed by Coudert Brothers)
C R R Hoeben SC with A P Coleman for the third and fourth respondents (instructed by PricewaterhouseCoopers Legal)
No appearance for the fifth to the fourteenth respondents
Intervener:
R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Graham Barclay Oysters Pty Ltd v Ryan
Negligence – Local authority – Duty of care – Harvesting of contaminated oysters – Oysters causing Hepatitis A infection – Knowledge of risk on part of officers of the authority – Failure by the authority to exercise statutory powers to control water pollution – Reasonableness – Class to whom duty owed when exercising power to control pollution – Causation – Whether minimisation of pollution and thus risk of viral contamination would have prevented infection.
Negligence – Oyster grower and distributor – Breach of duty of care – Harvesting of contaminated oysters – Oysters causing Hepatitis A infection – Failure to refrain from harvesting and selling oysters during relevant period.
Negligence – The State – Duty of care – Harvesting of contaminated oysters – Oysters causing Hepatitis A infection – Knowledge of risk on part of officers of the State – Failure to exercise general statutory powers – Relevance of State "control" of industry – Reasonableness – Justiciability – Failure to exercise specific statutory power of closure – Whether power enlivened – Class to whom duty owed when exercising power.
Practice and procedure – Federal Court of Australia – Representative action – Declaration of legal right concerning individual entitlement to recovery – Whether the making of such a declaration inappropriate or beyond power – Whether statute and nature of representative proceeding sustain a declaratory order.
GLEESON CJ. The principal facts, the nature of the proceedings, and the relevant legislative provisions, appear from the reasons for judgment of Gummow and Hayne JJ ("the joint judgment").
In December 1996, Mr Ryan consumed oysters that a relative had purchased from the companies described in the joint judgment as the Barclay companies. The oysters, which had been grown in Wallis Lake, near Forster, were contaminated. In consequence, Mr Ryan contracted the hepatitis A virus ("HAV"). The circumstances of the contamination are explained in the joint judgment. Heavy rainfall over a period in November 1996 had increased the risk of pollution of the lake from a number of sources, and had resulted in cessation of harvesting for four days. In February 1997, an HAV epidemic was notified, and on 14 February 1997 Wallis Lake growers ceased harvesting for the season.
In seeking to assign legal responsibility for the harm he suffered, Mr Ryan blamed the growers and distributors of the oysters (the Barclay companies), the Great Lakes Council ("the Council"), which was the local government authority that exercised regulatory functions, including functions designed to protect the environment, under the Local Government Act 1993 (NSW) ("the Local Government Act"), and the State of New South Wales ("the State"). Claims were also made under the Trade Practices Act 1974 (Cth) ("the Trade Practices Act") against the Barclay companies. That is how the case came to be litigated in the Federal Court. The Trade Practices Act claims were not directly in contest in this Court.
In the present appeals, the principal issue in relation to the claims against the Council and the State was whether there was a duty of care of such a nature that any act or omission shown to have been causally related to Mr Ryan's injury constituted a breach. In relation to the claims in tort against the Barclay companies, the existence of a duty of care was accepted; the principal issue was whether a breach had been established.
It is convenient to deal with the claims against the various defendants in the following sequence: the State; the Council; the growers and distributors. There are important differences between claims made against the State and the Council, on the one hand, and those made against the Barclay companies, on the other. A consumer of food suffered personal injury because the food was unfit for human consumption. His case against the growers and distributors of the oysters is essentially a straightforward product liability case. He sued the producers and suppliers of the product, the form of contamination being such that it was not reasonably discoverable upon any intermediate inspection. The existence and content of a duty of care was not in contest. But the nature of the case against the other defendants is far less obvious. The consumer is suing the government; local and State. He seeks to make the government directly liable. Originally there were attempts to establish tortious conduct on the part of persons, authorities or instrumentalities, for whom, or for which, the State might be vicariously responsible, but those attempts failed on the facts, and have not been pursued in this Court. The allegations now pressed against the State, and the Council, do not involve allegations of carelessness in the exercise of a statutory power. The complaint is not about acts, but about omissions. In the particular circumstances of the case, the issues, raised by this assertion of direct governmental liability in negligence, include what are, in the final analysis, issues of justiciability.
Citizens blame governments for many kinds of misfortune. When they do so, the kind of responsibility they attribute, expressly or by implication, may be different in quality from the kind of responsibility attributed to a citizen who is said to be under a legal liability to pay damages in compensation for injury. Subject to any insurance arrangements that may apply, people who sue governments are seeking compensation from public funds. They are claiming against a body politic or other entity whose primary responsibilities are to the public. And, in the case of an action in negligence against a government of the Commonwealth or a State or Territory, they are inviting the judicial arm of government to pass judgment upon the reasonableness of the conduct of the legislative or executive arms of government; conduct that may involve action or inaction on political grounds. Decisions as to raising revenue, and setting priorities in the allocation of public funds between competing claims on scarce resources, are essentially political. So are decisions about the extent of government regulation of private and commercial behaviour that is proper. At the centre of the law of negligence is the concept of reasonableness. When courts are invited to pass judgment on the reasonableness of governmental action or inaction, they may be confronted by issues that are inappropriate for judicial resolution, and that, in a representative democracy, are ordinarily decided through the political process. Especially is this so when criticism is addressed to legislative action or inaction. Many citizens may believe that, in various matters, there should be more extensive government regulation. Others may be of a different view, for any one of a number of reasons, perhaps including cost. Courts have long recognised the inappropriateness of judicial resolution of complaints about the reasonableness of governmental conduct where such complaints are political in nature.
In Brodie v Singleton Shire Council[1], I took the view that the non-feasance rule which previously applied to highway authorities was an aspect of a wider problem concerning the manner in which the law should relate the public responsibilities of persons or bodies invested by statute with a power to manage public facilities, including the responsibility to apply public funds for that purpose, and the rights of citizens who may be affected by the manner in which those responsibilities are exercised. In that case, three members of the majority expressly accepted that it may be proper and necessary for a court to decide whether the priorities of a local council in dealing with road repairs in various locations were reasonable[2]. The decision in the case required that view. Even so, the scope for judicial examination of the reasonableness of governmental spending priorities was not held to be, and cannot be, at large. Raising and spending money for road repairs involves setting priorities, not only between parts of the road system, but also between all the claims upon an authority's resources, and between the interests of taxpayers and those of road users. My view remains that setting priorities by government for the raising of revenue and the allocation of resources is essentially a political matter, and that, if the reasonableness of such priorities is a justiciable issue, that can be so only within limits. The way in which the case against the State and the Council is put in the present appeals squarely raises the wider problem mentioned above.
[1] (2001) 206 CLR 512 at 527 [12].
[2] (2001) 206 CLR 512 at 580-581 [162].
The claims against the State and the Council in the present case are based on non-feasance. Expressed in broad terms, they are that the State government, and local government, could and should have done more to prevent the outbreak of HAV. The potential political content of that statement is obvious. It may mean that the oyster industry was under-regulated; or that the local or State government should have introduced more stringent policies to control pollution; or that inadequate resources were devoted to protecting the quality of Wallis Lake as against other aspects of the environment. Expressed in legal terms, the complaint requires specification of a duty of care, breach of which was a cause of Mr Ryan's illness. Accepting that local government authorities, and State governments, have responsibilities for public health and safety, those responsibilities are owed to the public. Mr Ryan must establish that the State, and the Council, owed a duty of care to him, as a consumer of Wallis Lake oysters. If such a duty exists, then presumably a similar duty is owed to all consumers of all potentially contaminated food and, perhaps, to all persons whose health and safety might be affected in consequence of governmental action or inaction. What is the content of the duty owed to Mr Ryan, or to oyster consumers? If it is not possible to answer that question with reasonable clarity, that may cast doubt on the existence of the duty[3]. These are matters for separate consideration in relation to the State and the Council.
[3]Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 13 [5].
One thing is clear. Reasonable foreseeability of harm of the kind suffered by Mr Ryan, whilst a necessary condition for the existence of a duty of care on the part of the Council or the State, is not sufficient[4]. In the case of a governmental authority, it may be a very large step from foreseeability of harm to the imposition of a legal duty, breach of which sounds in damages, to take steps to prevent the occurrence of harm. And there may also be a large step from the existence of power to take action to the recognition of a duty to exercise the power. Issues as to the proper role of government in society, personal autonomy, and policies as to taxation and expenditure may intrude. Even where a statute confers a specific power upon a public authority in circumstances where mandamus will lie to vindicate a public duty to give proper consideration to whether to exercise the power, it does not follow that the public authority owes a duty to an individual, or a class of persons, in relation to the exercise of the power[5]. In the case of both the State and the Council, it is failure to exercise those powers, not negligence in the manner of their exercise, that is said to constitute the breach.
[4]Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 at 268 [35]; Sullivan v Moody (2001) 75 ALJR 1570 at 1575 [25], 1577 [42], 1581 [64]; 183 ALR 404 at 409-410, 412, 418.
[5]Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 465 per Mason J.
There is a further question which goes principally to the issue of causation, but which also reflects upon the issues of duty and breach. Let it be supposed that it is fair to say that both the Council and the State could have done more to seek to prevent the HAV outbreak. It does not follow that what they could, and should, have done, would have prevented the outbreak, or the harm to Mr Ryan. The evidence suggests that, where oysters are cultivated in areas of intensive human occupation and activity, there is always a risk of contamination. Depending upon exactly what it is said should have been done by the Council or the State, short of prohibiting the cultivation of oysters in Wallis Lake altogether, there may be difficulty in showing a causal relationship between the alleged shortcomings of government and the injury to Mr Ryan. This difficulty was one reason for the failure to establish tortious conduct on the part of persons or bodies for whom the State or the Council might have been vicariously responsible.
The case against the State
What was formerly a Crown immunity from tortious liability disappeared early in the history of New South Wales. Procedures for suing a nominal defendant on behalf of the government were first introduced in 1857[6]. The Claims against the Government and Crown Suits Act 1912 (NSW) provided in s 4:
"The petitioner may sue such nominal defendant at law or in equity in any competent court, and every such case shall be commenced in the same way, and the proceedings and rights of parties therein shall as nearly as possible be the same, and judgment and costs shall follow or may be awarded on either side as in an ordinary case between subject and subject."
[6]Claims against the Government of New South Wales Act 1857 (NSW) (20 Vict c 15).
The Crown Proceedings Act 1988 (NSW) abolished the nominal defendant procedure but, in s 5, adhered to the formula that proceedings and rights should be as nearly as possible the same as in an ordinary case between subject and subject[7]. That formula reflects an aspiration to equality before the law, embracing governments and citizens, and also a recognition that perfect equality is not attainable. Although the first principle is that the tortious liability of governments is, as completely as possible[8], assimilated to that of citizens, there are limits to the extent to which that is possible. They arise from the nature and responsibilities of governments. In determining the existence and content of a duty of care, there are differences between the concerns and obligations of governments, and those of citizens. Such differences led to an attempt to distinguish between matters of policy and operational matters. That distinction was never rigorous, and its validity and utility have been questioned[9]. Even so, the idea behind it remains relevant in some cases, such as the present. In Sutherland Shire Council v Heyman[10], Mason J said:
"The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognise that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness."
[7]See also Judiciary Act 1903 (Cth) s 64.
[8]Asiatic Steam Navigation Co Ltd v The Commonwealth (1956) 96 CLR 397 at 427.
[9]eg Pyrenees Shire Council v Day (1998) 192 CLR 330 at 393-394 [180]-[184]; Stovin v Wise [1996] AC 923 at 951-953.
[10](1985) 157 CLR 424 at 469.
One of the reasons why matters of the first kind are inappropriate as subjects of curial judgment about reasonableness is that they involve competing public interests in circumstances where, as Lord Diplock put it, "there is no criterion by which a court can assess where the balance lies between the weight to be given to one interest and that to be given to another"[11].
[11]Dorset Yacht Co v Home Office [1970] AC 1004 at 1067.
There are forms of governmental activity, which courts in the past endeavoured to describe by the term "operational", where there is no reason for hesitating to assimilate the position of governments to that of citizens in imposing duties and standards of care. Such activity might involve budgetary considerations, but that does not prevent such assimilation. Individuals and corporations also have to watch their budgets, and decisions about what is reasonable may have to take account of that. As the other extreme, the reasonableness of legislative or quasi-legislative activity is generally non-justiciable.
Here we are concerned with the problem of deciding, in a case where the government had certain powers, whether it is accountable, through the law of negligence, for not exercising its powers, or for not exercising them sufficiently. To apply that form of legal accountability requires the identification, not merely of a power, but also a duty; a duty of care owed to a citizen or a class of citizens. A conclusion that such a duty of care exists necessarily implies that the reasonableness or unreasonableness of the inaction of which complaint is made is a legitimate subject for curial decision. Such legitimacy involves questions of practicality and of appropriateness. There will be no duty of care to which a government is subject if, in a given case, there is no criterion by reference to which a court can determine the reasonableness of its conduct. That negative proposition leaves open other questions as to the circumstances in which the law will treat failure on the part of a public authority to exercise a power as a breach of a private law duty of care; but it is sufficient to resolve a substantial part of the case against the State in these proceedings.
In the Federal Court, at first instance, Wilcox J described the primary case against the State as being that it failed to prepare or implement any proper oyster management plan for Wallis Lake. It had no statutory duty to take such action, but there were various powers available to it upon which it could have relied if it had decided to do so. Wilcox J also referred to arguments that sought to make the State responsible for alleged failures on the part of the Environmental Protection Authority and the Health Department. Those arguments were rejected on the facts, and it is unnecessary to say more about them. As to the primary case, it is to be noted that it was expressed in terms of breach. The formulation of the breach implies a legal duty, owed by the New South Wales government to Mr Ryan and all consumers of oysters grown in Wallis Lake, to "prepare and implement [a] proper oyster management plan". That case was later narrowed by reference to certain aspects of management. There was a separate argument that, given the deficiencies of the state of management as at November 1996, the State should have exercised a power to close the fishery. That argument occupied more familiar territory, pointing to a specific statutory power, conferred for a purpose, and asserting a duty to exercise the power in the circumstances[12].
[12]cf Stovin v Wise [1996] AC 923; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1.
Wilcox J held that, "through various agencies, the New South Wales government exercised substantial managerial control over the Wallis Lake oyster industry". This was a key finding in his acceptance of the case against the State; an acceptance that was upheld by Lee and Kiefel JJ in the Full Court. Kiefel J rested her decision upon what she regarded as an obligation of the State to exercise its statutory power to prohibit harvesting of oysters until the Minister could be assured of the likelihood of the oysters' fitness for consumption. Lee J upheld the conclusion of Wilcox J that the State was under a duty of care to ensure that powers it had created were exercised to reduce the risk of harm being caused to consumers of oysters, and that the State had breached that duty by failing to manage the waters of the Lake by undertaking, or causing others to undertake, appropriate surveys, and by implementing harvesting controls.
For the reasons that follow, I prefer the reasoning of Lindgren J, who dissented on the claim against the State.
It is convenient to deal first with the matter of management of the fisheries, and to deal later with the argument concerning the power of closure.
The proposition that the New South Wales government exercised substantial managerial control over the Wallis Lake oyster industry requires further analysis. If taken at face value, it virtually forecloses further debate. Control is a well established basis for the existence of a duty of care in a public authority or a private citizen[13]. Managerial control, if it existed, would seem to equate the position of the State with that of the Barclay companies, which admittedly owed a duty of care. But what exactly does it mean to say, in a market economy, that the State has substantial managerial control over an industry conducted by private enterprise? Does it mean any more than that the government has governmental power? Wilcox J referred to the following aspects of control:
"(a)the State owned, and had powers of control over, the lake;
(b)through the Department of Fisheries, it established, and supervised the operations of, a mosaic of oyster leases;
(c)through the Department of Fisheries, it issued, and enforced the provisions of, aquaculture permits;
(d)through the Department of Health, the State supervised the depuration process, including the nature and location of water intake points and the design, construction and maintenance of depuration tanks and ultra-violet facilities;
(e)through the EPA, the State had powers under the Clean Waters Act to remove, disperse, destroy or mitigate pollution of waters (s 27) and to carry out inspections and investigations of premises (s 29);
(f)through a number of agencies, the State was a participant in the Wallis Lake Estuary Management Committee, one of whose objectives was to prepare a management plan designed 'to sustain a healthy, productive and attractive estuary'; and, most importantly,
(g)through the Minister for Fisheries, it had the power - at any time, to prohibit the taking of oysters from the lake."
[13]Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551-552; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 24-25 [43]-[46], 42-43 [104], 61 [166], 82 [227], 104 [304], 116 [357]; Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 at 263 [18]; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 558-559 [102].
It has already been noted that Wilcox J did not find the government departments and authorities mentioned guilty of tortious conduct for which the State was vicariously responsible. In order to understand the legal implications of various aspects of governmental control, it is necessary to examine the legislative and regulatory structure set up by the State Parliament, and the executive. This appears in the joint judgment. A statement that the State had managerial control over the oyster industry involves a degree of ambiguity. The State, the body politic, was the government. Its legislature had all the powers given to it by its Constitution, subject to the Commonwealth Constitution. Its executive had powers given by the legislature. But Mr Ryan seeks to make out a case based on non-feasance. What is the basis for saying that the State owed a legal duty to the consumers of Wallis Lake oysters to exercise to a greater extent governmental powers of regulation over, or affecting, the conduct of producers and distributors of oysters? Why could not the State have relied on self-regulation by the industry itself? The assumption that a State government owes to individual citizens a legal duty to care for the health and safety of all citizens, or all consumers of food, or all consumers of oysters, by exercising its regulatory powers to the extent judged reasonable by a court, has far-reaching implications.
It emerged from the evidence that, for some years before 1996, there had been, within government and industry circles in New South Wales, a continuing debate about the appropriate boundaries between government regulation and industry self-regulation.
In April 1992, an Advisory Committee drafted for the Minister for Health Services Management a report entitled "New South Wales Oyster Quality Assurance Program". It supported a large measure of industry self-regulation, with government involvement. It included the following:
"… inherent in the move towards industry self regulation is a consideration of the role of government agencies, particularly the NSW Health Department because the Minister for Health is charged with a responsibility for protecting the public's health and has appropriate regulations under the Food Act to ensure that foods which reach the consumer are indeed fit for consumption. In short, irrespective of any industry endeavours it is the NSW Health Department that makes the final judgement about the product and has the powers to impose penalties.
… if the industry can achieve via self regulation a situation whereby its product meets the desired standards and offers a high degree of assurance to the public then the active role of government must be greatly reduced with consequent savings to the public purse.
It is hoped that government will recognise this and respond accordingly by fostering the quality assurance objective.
In the Advisory Committee's view, non-participants however few or many they may be, negate the whole concept of a quality control program and will almost certainly compromise its integrity at some stage.
It is recommended therefore that the government amends purification plant permit conditions so that all oysters treated in plants be cultivated, harvested and purified in accordance with an approved quality assurance program.
…
As an incentive for industry to meet the costs of quality assurance programs, oysters produced under a quality assurance program could be appropriately endorsed.
The endorsement is made through the quality assurance program and not the NSW Health Department, enhancing industry self-regulation and quality assurance program integrity."
In February 1994 a report to the Minister recorded:
"The NSW Oyster Quality Assurance Program is based on a concept of industry self-regulation at the estuary level, with a minimum of central supervision."
An Advisory Committee made further recommendations as to the detail of a Quality Assurance Program. A Ministerial paper to Cabinet in November 1994 stated:
"4.14The QAP is to be industry run and industry funded. Funding for the program is required at three levels:
(i)to pay for meat testing prior to marketing the oysters - this is required now and, as now, will be funded by the individual oyster farmer;
(ii)to pay for the environmental testing required by, and any other costs associated with, the estuary-based program - it is proposed that these funds will be collected at the local level by the local committee responsible for developing and implementing the program;
(iii)to pay for statewide co-ordination of the estuary based programs and other costs associated with the QAP - it is proposed that this requirement would be met through an 'annual contribution' required from all oyster farmers by Regulation made under Section 156 of the Fisheries Management Act 1994."
Other evidence to like effect is set out in the reasons of Lindgren J. It demonstrates that the nature and extent of State government involvement in oyster quality control was a matter of policy, that it received attention at the highest levels, that it had substantial budgetary implications, and that it involved government concern to encourage an important primary industry.
This demonstrates two things. First, the proposition that the State government had substantial managerial control over the oyster industry is, at best, an over-simplification. Secondly, the proposition that the State had a legal duty of care, owed to oyster consumers, obliging it to exercise greater control (and, presumably, to permit less industry self-regulation) takes the debate into the area of political judgment. By what criterion can a court determine the reasonableness of a government's decision to allow an industry a substantial measure of self-regulation?
This is not a case where past experience, in New South Wales or elsewhere, had demonstrated the inadequacy of a quality assurance program to which the State was a party. It was, of course, known that there were risks to consumers, which was why there was a need for a quality assurance program in the first place. But such knowledge does not warrant a conclusion that the State, as a body politic, directly owed a legal duty to consumers to increase the level of regulation of the industry, or to exercise, to a greater extent, the powers of control available to it.
However, there is one respect in which there was said to have been a negligent failure to exercise a specific power.
The Fisheries Management Act 1994 (NSW), by s 189, empowered the Minister to impose a prohibition, called a fishing closure, in relation to the taking of fish under an aquaculture permit if satisfied that the area was in such a condition that the taking of fish ought to be suspended, or that the fish were, or were likely to be, unfit for human consumption. The power was conditioned upon the existence of a certain state of satisfaction. No such state of satisfaction existed at any time relevant to the present proceedings. The Minister cannot have been under a legal duty to impose a fishing closure for the reason that, in the state of affairs that existed, he had no power to do so.
Kiefel J considered that, if the Minister had been properly informed, the rainfall in November 1996 must have given him reason to be concerned about the fitness for human consumption of Wallis Lake oysters. She said that "the State thereby came under a duty to exercise its powers and prohibit harvesting until the Minister could be assured of the likelihood of the oysters' fitness for consumption".
It is necessary to distinguish between a public duty, enforceable by mandamus, to give consideration to the exercise of a power, and a legal duty, owed to a citizen, to exercise the power. It is a duty of the second kind that is here asserted. Bearing in mind past experience, and industry practice, as known in November 1996, it is not entirely clear what her Honour had in mind as to the information the Minister would have had if properly informed, or from whom that information might have been expected to come. It appears that her Honour aggregated the sources of information potentially available to "the State" rather than the information actually before the Minister. And "reason for concern" is not the statutory condition for the existence of the power given by s 189. More fundamentally, however, the legislative grant to a Minister of a power to impose a fishing closure if satisfied of certain matters did not subject the State to a legal duty of care, owed to the plaintiff, or consumers of Wallis Lake oysters. It may be accepted that the reasonableness of a decision to exercise the power of closure would be a justiciable issue, and that the potential for judicial review of such a decision on public law grounds exists. But it is the existence of a common law duty of care that is presently in question. The power given by s 189 is a power to protect the public, not a specific class of persons. Similar powers, covering a wide range of activities, are given to Ministers and government authorities in the interests of public health and safety. A legislative grant of power to protect the general public does not ordinarily give rise to a duty owed to an individual or to the members of a particular class[14].
[14]Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 39 [93].
The duty of care upon which the case against the State was based was not made out.
The case against the Council
Part of the basis of the holding in the Federal Court of a duty of care on the part of the State was what was said to be its managerial control over the oyster industry. No such control existed in the Council. However, a different form of control was said to be relevant: powers of control over the activities that constituted potential sources of pollution of Wallis Lake. From those powers, conferred in the main by the Local Government Act, coupled with foreseeability of harm, it was argued that there was a duty on the part of the Council to eliminate or reduce the risk of viral contamination of Wallis Lake; a duty owed to consumers of oysters grown in the lake and, presumably, all others (such as swimmers) who might suffer physical harm in consequence of such contamination.
The content of the duty, thus asserted, raises difficulties. A legal duty to eliminate the risk of viral contamination of the waters of the lake seems far-fetched. The evidence showed that such a risk could never have been eliminated. Wilcox J did not accept that there was such a duty. But, if the duty were merely to reduce, or take reasonable steps to reduce, pollution of the lake, the problem of causation earlier mentioned arises. Who is to say that risk reduction would have spared Mr Ryan from illness? That question, in turn, points up the remoteness of the powers of control available to the Council from the cause of harm to Mr Ryan, that is to say, the consumption of oysters produced and distributed by the Barclay companies[15]. Furthermore, the same problem affects the case against the Council as affected the case against the State: the circumstance that, in the public interest, certain powers of regulation of activity within its area are vested by statute in the Council does not mean that the Council owes a legal duty to individuals or classes of person whose health may be affected, directly or indirectly, by decisions made as to the exercise of those powers.
[15]cf Agar v Hyde (2000) 201 CLR 552.
In the Full Court, Lindgren and Kiefel JJ both concluded that the Council was not subject to a duty of care of the kind alleged. I agree with that conclusion.
The starting point for consideration is the statutory provisions conferring on the Council its relevant functions and powers. These provisions are set out in the joint judgment.
In considering the powers and responsibilities of the Council, for the purpose of determining whether it owed a duty of care to oyster consumers, an aspect of the facts should be noted. Wallis Lake is large, and there were many different ways in which, and places at which, human activity on or around the lake could result in pollution of its waters. There was no particular place of pollution that was shown to be responsible, or mainly responsible, for contamination of the oysters. As Lindgren J pointed out, assertions of a duty to reduce or minimise pollution are difficult to give practical content of relevance to the harm suffered by Mr Ryan. As with the State, the complaint is that the Council did not do enough to reduce pollution, but it is not possible to point to any specific act or omission that would have prevented harm to Mr Ryan[16].
[16]cf Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307.
The powers conferred upon the Council, insofar as they are presently relevant, were conferred for the benefit of the public generally; not for the protection of a specific class of persons[17]. In Pyrenees Shire Council v Day[18], there was a clearly identified cause of harm, specific action or inaction on the part of the Council, and, as Kiefel J pointed out, "coincidence between the action which was necessary to prevent the fire, the powers given to the Council and the purpose for which they were given". Here the Council had general powers for the protection of public health, which would have embraced activity of the kind Wilcox J thought should have been undertaken, such as regular and comprehensive surveys of sanitary facilities in areas around the lake, or water testing. But there is nothing in the relevant statutory provisions, or in the circumstances concerning the relationship between the Council and oyster consumers, to justify a conclusion that the Council's powers were given for the protection of oyster consumers, or any other particular class.
[17]cf Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 39 [93].
[18](1998) 192 CLR 330.
The duty of care upon which the case against the Council was based was not made out.
The case against the Barclay companies
Here, the issue is one not of duty, but of breach.
Wilcox J said:
"The Barclay companies acknowledge they owed a duty of care to consumers of their oysters. They deny they breached that duty and assert that, if they did, this did not cause the HAV infection suffered by [Mr Ryan] and relevant group members."
There was mention, in the course of argument in this Court, of the possible significance of the Trade Practices Act, and the causes of action it creates, upon the existence of a common law duty of care in the Barclay companies. That is an interesting topic, but in the light of the concession noted above, and the manner in which the case was argued, both in the Federal Court and in this Court, the present is not the occasion to pursue it.
Although counsel for Mr Ryan argued that the Barclay companies were negligent in the decisions they made in November 1996 as to when to cease and when to re-commence harvesting, Wilcox J did not accept that there was any causal connection between that conduct and the HAV epidemic. Wilcox J noted that it was accepted that Mr Barclay was at all material times aware of the existence of potential sources of viral pollution to the lake, and he knew that depuration was not adequate to remove viruses, and that oyster meat testing would not necessarily show viruses. Wilcox J summarised the negligence of the Barclay companies in the following sentence:
"In my opinion, in selling without warning oysters grown in waters known to be subject to possible undetectable viral contamination, both Barclay companies breached their duty of care to ultimate consumers of the oysters."
It is not clear what the words "without warning" add to that finding. It is hard to imagine that Wilcox J contemplated that the oysters might have been sold with a warning. Jonathan Swift wrote: "He was a bold man that first eat an oyster"[19]. It would be a bold fish merchant that displayed oysters for sale accompanied by a warning that they might be subject to undetectable viral contamination. The negligence found was in selling the oysters in the prevailing circumstances as known to the Barclay companies. The corollary is that they should have stopped selling Wallis Lake oysters until such time as improved quality assurance procedures made it reasonable to re-commence.
[19]Swift, Polite Conversation, Dialogue 2 (1738).
In the Full Court, Kiefel J decided the case on the basis "that even if the harvesting of oysters had not been prohibited in the circumstances prevailing, as it should have been, the Barclays companies should not have supplied oysters for sale until a sufficient period had elapsed by which the risk of contamination could be regarded as acceptable or tests sufficiently indicated that to be the case". Lee J agreed with Kiefel J.
Lindgren J was of a different view. He said:
"Having regard to the fact that it is not possible anywhere where human beings are to guarantee that purity of the water, it seems to me that the critical question in the present case is whether, as a result of what Mr Barclay knew or should have known about the quality of the water in the Lake, the Barclay companies' duty of care required them to do more than simply to suspend harvesting following a 'fresh', to depurate in accordance with Mr Bird's booklet and to test the flesh of sample oysters before and after depuration.
So far as Mr Barclay in fact knew, subject to the necessity of ceasing harvesting following a 'fresh', the water of the Lake was safe water in which to grow oysters. The Lake's oysters had never previously given rise to an outbreak of hepatitis A or of any other oyster-related disease, although no doubt there had previously been rainfall events similar to that of 23-25 November 1996. Mr Barclay testified that over the four year period from 1989 to 1993, he had regularly taken the Council's Mr Brooker out in his boat to test the water in the Lake at twelve locations and that the results were satisfactory. He said that in the 'paddock' where virtually all Barclay Oysters' harvesting was done, the results were always excellent. Apparently, depuration and suspension of harvesting following a 'fresh' had proved sufficient measures for the Lake's oyster growers to take in the past.
…
Depuration, suspension of harvesting and flesh testing cannot guarantee that an oyster is safe to eat. As his Honour observed, the starting point was to attack faecal contamination of the Lake at source. Whether it was reasonable for the Barclay companies to involve themselves in that activity requires
'a consideration of the magnitude of the risk and the degree of the probability of its occurrence along with the expense, difficulty, and inconvenience of taking alleviating action …' (Wyong Shire Council v Shirt...[20]).
His Honour thought that their duty of care required the Barclay companies to conduct their own sanitary survey of that part of the shoreline of the Lake, the rivers and islands that was publicly accessible, then attempt to procure governmental or local governmental involvement to ensure that any faecal contamination revealed by the survey was rectified.
But, with respect, his Honour did not consider the matters referred to in the passage from Wyong Shire Council v Shirt set out above from the viewpoint of the Barclay companies. Other particular questions arise. What about the future, would the Barclay companies be obliged to update their sanitary survey frequently and regularly? At what point, if any, would they become entitled to assume that the issue of faecal contamination of the Lake could be left to the authorities? If it is accepted that they would become entitled to make that assumption at some time, why was Mr Barclay not entitled to make it in November 1996?
His Honour had regard to the difficulty that there was no assurance that the authorities would act, saying that if they did not do so, Barclay Oysters should have re-laid the oysters in other waters for a period before sale. But this possibility was not put to any witness and the whereabouts of the other waters and the cost of relaying the oysters were matters not explored in the evidence. I think it appropriate, on the evidence, to regard the alternative as simply one of ceasing business entirely or of marketing the oysters with an effective warning that effectively brought home the risk that the oysters might carry the HAV. But such a warning would have put the Barclay companies out of business. Accordingly, in substance, the true alternative to the course of conduct in fact pursued was to cease business.
It seems to me that on the evidence of the lack of any previous outbreak of health problems arising from the consumption of oysters grown in the Lake and the lack of knowledge otherwise of Mr Barclay of the existence of an actual problem as distinct from potential sources of faecal contamination of the Lake, the Barclay companies' duty of care did not reasonably require them either to take the course that his Honour outlined or to suffer a closure of their business until somehow they could be completely assured that they were putting into the market a product that was free of defects."
[20](1980) 146 CLR 40 at 47.
The course of proceedings raises a question as to the approach this Court should take in an appeal where there are concurrent findings of negligence (or absence of negligence) at a trial and in an intermediate appellate court. A recent example of such an appeal was Woods v Multi-Sport Holdings Pty Ltd[21]. In that matter, a trial judge in Western Australia had decided that the owner of an indoor cricket facility, who undoubtedly owed a duty of care to an injured player, had not been negligent in failing to provide certain protective equipment and in failing to give a certain warning. That decision was unanimously upheld by the Full Court of the Supreme Court of Western Australia. By majority, a further appeal to this Court was dismissed. All members of this Court examined in detail the reasoning of the trial judge for the purpose of deciding whether error was shown. The two dissenting judges, McHugh and Kirby JJ, both found that there was error, and favoured reversing the decision of the trial judge and the Full Court.
[21](2002) 76 ALJR 483; 186 ALR 145.
As Hayne J pointed out in Woods[22], although a finding of negligence (or absence of negligence) is conventionally described as a finding of fact, it also involves a normative judgment. The reasons given by the minority in Woods in favour of reversing the decision of the Western Australian courts illustrate the point. There was no disagreement with the trial judge on any matter of primary fact. The disagreement was with the judge's appreciation of the reasonableness of the conduct of the respondent, and with the weight given, or not given, by the judge to certain considerations bearing upon that question.
[22](2002) 76 ALJR 483 at 506 [137]-[141]; 186 ALR 145 at 176-177.
Concurrent findings may exist at different levels of particularity, and either with or without an element of normative judgment. In Bridgewater v Leahy[23], a case concerning an allegation of unconscionable conduct, there were concurrent findings that a transferor of land was not under any special disability, and that a transaction was not unconscionable. Both findings were reversed, by majority, in this Court.
[23](1998) 194 CLR 457.
In Waltons Stores (Interstate) Ltd v Maher[24], Deane J, referring to concurrent findings that a party to litigation entertained a certain belief, and had acted on a certain inducement, (findings of primary fact, involving no value judgment), said:
"This Court should not, in the absence of special reason such as plain injustice or clear error, disturb them. In a context [in which] the cost of litigation has gone a long way towards effectively denying access to the courts to the ordinary citizen who lacks access to government or corporate funding, it is in the overall interests of the administration of justice and of the preservation of at least some vestige of practical equality before the law that, in the absence of special circumstances, there should be an end to the litigation of an issue of fact at least when the stage is reached that one party has succeeded upon it both on the hearing before the court of first instance and on a rehearing before the court of first appeal."
[24](1988) 164 CLR 387 at 434-435.
Later, in Louth v Diprose[25], Deane J added that it was immaterial that the concurrent findings were of primary fact or involved conclusions and inferences drawn from primary facts, or that there were differences in the reasoning of the primary judge and the first appellate court, or that there was a dissentient in the first appellate court. He did not expressly refer to a difference between purely factual conclusions and conclusions that involved the application of standards of behaviour. However, in Baffsky v Brewis[26], Barwick CJ, with whom Stephen, Mason, Jacobs and Aickin JJ agreed, referred to the rule in relation to "concurrent findings of fact or concurrent views as to the exercise of a discretion." There is no reason to deny the application of the rule to a finding of negligence. However, whether there is "plain injustice or clear error" might be affected by the extent to which the decision involves value judgment, explicit or implicit.
[25](1992) 175 CLR 621 at 634.
[26](1976) 51 ALJR 170 at 172; 12 ALR 435 at 438.
The rule that an ultimate court of appeal will only disturb a finding of fact that is shown to be clearly erroneous appears to have originated in the nineteenth century in Privy Council appeals from India, and to have been gradually developed and extended to appeals to the Privy Council from all parts of the British Empire, and then to all courts of last resort[27]. In Owners of the "P Caland" and Freight v Glamorgan Steamship Co[28] Lord Watson said:
"[I]t is a salutary principle that judges sitting in a Court of last resort ought not to disturb concurrent findings of fact by the Courts below, unless they can arrive at - I will not say a certain, because in such matters there can be no absolute certainty - but a tolerably clear conviction that these findings are erroneous. And the principle appears to me to be specially applicable in cases where the conclusion sought to be set aside chiefly rests upon considerations of probability."
[27]See Major v Bretherton (1928) 41 CLR 62 at 68-70 per Isaacs J.
[28][1893] AC 207 at 216.
The rule exists alongside, but is not co-extensive with, the requirement that an appellate court will recognise the limitations on its capacity to make factual judgments where they depend in part upon the observation of witnesses who have been seen only by the trial judge. It has a different rationale. The legal system does not provide a second level of appeal in order to give any sufficiently determined litigant a third chance of success. Indeed, since the introduction of the requirement of special leave, there is no general right of appeal to this Court. The rule involves an acceptance that it is unjust that a litigant who has twice succeeded on an issue of fact should be deprived of the benefit of the success merely because an ultimate court of appeal would have taken a different view of the facts.
A judgment as to the reasonableness of the conduct of the Barclay companies in response to the risk of contamination required an evaluation of "the magnitude of the risk and the degree of probability of its occurrence". It also required an examination of "the expense, difficulty and inconvenience" of the available alternatives. For practical purposes, the alternative was a cessation of harvesting for an indefinite period, or for the remainder of the harvesting season, of the kind that ultimately occurred on 14 February 1997. When Lindgren J said that the alternative was "to cease business", or "to suffer a closure of their business until somehow they could be completely assured that they were putting into the market a product that was free from defects", he can hardly have been referring to something different from that which was done by all growers of Wallis Lake oysters on 14 February 1997. By that time of course, viral contamination was no longer merely a risk; it was an established fact. Even so, the temporary cessation of harvesting in November 1996 was a response to a recognised increase in the risk of contamination. It was followed by a resumption of harvesting and selling over the Christmas and New Year periods. The critical question for the Federal Court was whether, in the light of what was known about the nature and degree of the risk of contamination, that resumption of commercial activity was reasonable. I am not persuaded that any of the four judges in the Federal Court misunderstood, or failed to address, that question. The answer given by the majority was fairly open. Lindgren J answered the question differently; but I am not persuaded that the majority view involved clear error or injustice.
Conclusion
I would dismiss the appeals of the Barclay Companies (No S258/2001) and of Mr Ryan (No S259/2001) with costs. I would allow the appeal of the State (No S261/2001) with costs.
I agree with the concluding paragraph of the orders proposed by Gummow and Hayne JJ.
GAUDRON J. I agree with the orders proposed by Gummow and Hayne JJ and with their Honours' reasons. There is, however, one matter upon which I would make separate comment. That matter concerns the relationship between certain specific obligations cast upon a corporation by the Trade Practices Act 1974 (Cth) ("the Act") and the general law of negligence.
For present purposes it is sufficient to refer to two provisions of the Act upon which Mr Ryan relied unsuccessfully at first instance. The first is s 52(1) which provides:
" A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
Pursuant to s 82 of the Act, a person who suffers loss or damage by conduct that contravenes certain provisions of the Act, including s 52(1), is entitled to recover the amount of that loss or damage.
The second provision of the Act which invites attention is s 75AD, which is in Pt VA of the Act. That Part is concerned with the liability of manufacturers and importers of defective goods. "Manufactured" is defined in s 75AA to include "grown, extracted, produced, processed and assembled."
Section 75AD imposes liability on a corporation, which in trade or commerce supplies goods manufactured by it, to pay compensation to any individual who suffers injury because of a defect in those goods. By s 75AK(1), it is relevantly a defence to a claim for compensation under Pt VA of the Act, including s 75AD if it is established that:
"(a)the defect in the ... goods that is alleged to have caused the loss did not exist at the supply time; or
(b)they had that defect only because there was compliance with a mandatory standard for them; or
(c)the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered".
Were the general law of negligence to develop to a point where, in circumstances in which ss 52 and 75AD operate, it imposed more onerous obligations than are imposed by those provisions, it would, in my view, be necessary to consider whether those provisions had supplanted the general law. And the same may well be true of other provisions in the Act. However, as the reasons of Gummow and Hayne JJ demonstrate, the general law of negligence has not yet developed to that point.
To say that it is not yet necessary to consider whether particular provisions of the Act have supplanted the general law in the circumstances in which they operate is not to say that the questions posed by particular provisions of the Act are unrelated to those posed by the general law of negligence. Thus, if the supply of goods by a corporation in trade or commerce without warning as to their possible dangers or defects does not constitute conduct that is likely to mislead or deceive for the purposes of s 52(1) of the Act, as was held at first instance in this case[29], it is difficult to conceive that, nonetheless, the general law would impose a duty to warn as to those dangers or defects.
[29]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 227 [378].
Although different concepts inform the law of negligence, ordinarily there is a duty to warn only if there is a foreseeable risk that a person will be led to believe that something is safe when it is not. And if conduct by a corporation would have that consequence, it would seem inevitable that that conduct would be likely to mislead or deceive for the purposes of s 52(1) of the Act.
A somewhat different issue is raised by the defence provided by s 75AK(1)(c) to a claim for compensation under s 75AD for injury resulting from defective goods. At first instance, Mr Ryan's claim for compensation under s 75AD was dismissed because, in terms used in s 75AK(1)(c), "the state of scientific or technical knowledge at the time when [the oysters] were supplied ... was not such as to enable [the] defect to be discovered"[30]. Once it was concluded that scientific or technical knowledge did not permit discovery that the oysters grown at Wallis Lake had been contaminated by the hepatitis A virus, a question then arose as to what, if any, action could have been taken to avoid a risk of injury to Mr Ryan. As Gummow and Hayne JJ point out, the only possible courses, over and above the precautions already taken, were to cease selling oysters grown at Wallis Lake or, which was likely to have the same effect, to warn as to their possible viral contamination.
[30]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 226-227 [377].
A duty not to supply goods in circumstances where those goods are not inherently dangerous and neither science nor technology permits discovery of possible defects or dangers is not compatible with the notion that the law of negligence operates by imposing a duty to take reasonable care to avoid a foreseeable risk of injury. Nor is a duty not to supply goods in those circumstances readily compatible with the terms of s 75AK(1)(c) of the Act.
McHUGH J. These appeals arise out of actions in the Federal Court of Australia in which Mr Ryan sued Graham Barclay Oysters Pty Ltd and Graham Barclay Distributors Pty Ltd, the State of New South Wales and the Great Lakes Council for damages for injury suffered when he ate contaminated oysters. The Federal Court found that Graham Barclay Oysters Pty Ltd had contravened ss 74B and 74D of the Trade Practices Act 1974 (Cth)[31] and that the Barclay companies breached the duty of care that they admittedly owed to Mr Ryan[32]. The Federal Court also held that the State of New South Wales[33] and the Great Lakes Council[34] had breached duties of care that each of them owed to Mr Ryan. Differently constituted majorities of the Full Court of the Federal Court[35] allowed an appeal by the Great Lakes Council but dismissed appeals by the State of New South Wales and the Barclay companies.
[31]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 224 [365]-[368], 226 [374]-[375] per Wilcox J.
[32]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 220-221 [351]-[354] per Wilcox J.
[33]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 217 [336], 218 [337] per Wilcox J.
[34]Ryan v Great Lakes Council (1999) 102 LGERA 123 at 208 [292], 209 [299] per Wilcox J.
[35]Graham Barclay Oysters Pty Ltd v Ryan (2000) 102 FCR 307.
The issues in the appeal are whether the State or the Council owed a duty of care to Mr Ryan and whether the Barclay companies breached the duty of care that they admittedly owed to Mr Ryan. In my opinion, neither the State nor the Council owed a duty of care to Mr Ryan and the Barclay companies did not breach the duty of care they owed to him.
Factual background
In December 1996 and early January 1997, Mr Ryan and his family consumed oysters purchased from Barclay Distributors Pty Ltd. The oysters were grown in the Wallis Lake in New South Wales. In late January 1997, Mr Ryan began to feel unwell. Blood tests revealed that he was suffering from the hepatitis A virus ("HAV"). The Department of Health reported that notifications of HAV began to increase in the week commencing 20 January 1997, peaking on 3 February 1997. By 10 February 1997, the Department had established a link between those infected with HAV and the consumption of oysters grown in the Wallis Lake. A New South Wales government taskforce ultimately attributed 444 cases of HAV to the consumption of oysters grown in the Lake.
HAV and oysters
HAV is spread by the "faecal-oral route" − it is contracted when humans ingest material contaminated with human faeces which contains the virus. It can only be transmitted through human faeces. HAV has an incubation period of between 15 and 50 days; most cases of infection occur within 30 days of contact. It is a resilient virus that can survive in the environment for periods of three months or longer.
Oysters are filter feeders, processing 10 to 20 litres of water per hour by sucking water in and excreting particles through the oyster's normal digestive processes. Some particles, including those that contain HAV, are retained while others are excreted. HAV does not attack oysters; ordinarily the virus is retained in the oyster's flesh. Viral contamination of the oyster is likely to be at a level of concentration that far exceeds the concentration of the virus in the water.
The geographic region
Wallis Lake is the largest oyster growing area in New South Wales. Although oysters have been grown in the Lake for nearly a century, there was no record of HAV contamination before the outbreak in late 1996. Occasionally, however, faecal contamination occurred in the Lake.
The catchment area of the Lake includes the major towns of Forster and Tuncurry, various smaller townships and homes built along the rivers and countryside but which are not part of any township. Sixty-five percent of the area of the Lake is within the boundaries of the Great Lakes Council. Faecal waste from septic tanks and treatment sites could escape at numerous points within the Lake's catchment area and enter the Lake through storm water drains. During the period 1989-1993, the Council occasionally detected faecal contamination when testing water in the Lake. It did no testing in 1996.
Faecal waste was more likely to enter the Lake after periods of heavy rainfall. Between 23 and 25 November 1996 − shortly before the HAV outbreak occurred − heavy rain fell in the Lake catchment area.
Methods of avoiding oyster contamination
Since 1983, health regulations required oysters grown in New South Wales to be depurated for a period of at least 36 hours to avoid contamination. Under the depuration process the oysters are placed in tanks of clean and disinfected estuarine water to which ultra-violet light is applied to destroy viruses and bacteria in the water. However, the ultra-violet light does not destroy viruses unless it contacts them. Expert evidence established that while depuration, carefully performed, provides satisfactory results, shellfish can retain viruses after depuration when they are taken from heavily polluted waters. Polymerise chain reaction ("PCR") testing constitutes the only effective method of detecting HAV in oysters. In November 1996, however, that method was still in the research stage. Only a limited number of laboratories could carry out the tests. Moreover, PCR testing was very expensive, destroyed the oyster, and frequently returned false negatives.
Following heavy rain − known as a "fresh" − the practice of the industry was to suspend harvesting until the water had cleared. In accordance with this practice, Graham Barclay Oysters Pty Ltd did not harvest oysters between 23 and 27 November 1996. On 11 February 1997, when the Barclay companies became aware of the HAV outbreak, they ceased harvesting and recalled oysters they had sent to distributors and retailers. On 14 February 1997, all Wallis Lake oyster growers voluntarily ceased harvesting. The Barclay companies did not resume harvesting until the 1997-98 season.
Oyster flesh tests revealed that faecal contamination was widely disbursed throughout the estuary. A sanitary survey was conducted to locate the sources of the pollution and to eliminate them. The faecal contamination emanated from multiple points, the vast majority being land-based sources.
Liability of public authorities − the Council and the State
A public body invested with a discretionary statutory power may be in breach of a common law duty of care if it fails to exercise the power for the benefit of an individual or class of individuals. In these cases, failure to exercise the power given constitutes actionable negligence that sounds in damages[36]. In determining whether a public authority has breached a common law duty by failing to exercise a statutory power, it is essential to examine the words and policy of the legislation[37]. That is because the legislation may indicate that the legislature has legislated to cover the field and excluded all common law duties of care[38]. In other cases, the imposition of a common law duty may be inconsistent with or undermine the effectiveness of the duties imposed by the statute[39]. In some cases, the circumstances of the case − for example, active intervention by the authority or reliance by the plaintiff − may establish a duty of care. But the legislation may give the authority such a wide discretion to exercise the power in question that the tribunal of fact cannot find that the failure to exercise the power constituted a breach of the duty.
[36]Sutherland Shire Council v Heyman (1985) 157 CLR 424; Pyrenees Shire Council v Day (1998) 192 CLR 330; Romeo v Conservation Commission (NT) (1998) 192 CLR 431; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; Brodie v Singleton Shire Council (2001) 206 CLR 512.
[37]Pyrenees Shire Council v Day (1998) 192 CLR 330 at 377 [126] per Gummow J; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 19 [27] per Gaudron J, 59 [160] per Gummow J, 72 [203] per Kirby J; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 540 [56] per Gaudron, McHugh and Gummow JJ. See also Stovin v Wise [1996] AC 923 at 934 per Lord Nicholls of Birkenhead, Lord Slynn of Hadley agreeing, 952 per Lord Hoffmann, Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreeing.
[38] Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 18-19 [26]-[27] per Gaudron J; South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1992] 2 NZLR 282 at 297-298 per Cooke P.
[39]Sullivan v Moody (2001) 75 ALJR 1570; 183 ALR 404; Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at 275-276 per Richardson P, Thomas and Keith JJ, Henry J agreeing.
Legislatures often vest discretionary powers in public authorities for the specific purpose of protecting the community. Some powers may be vested in the authorities for the protection of a specific class of persons who may be exposed to risks of harm that they are powerless to avoid and sometimes unable to identify. But the legislature has made these powers exercisable at the discretion of the authorities, and the common law does not seek to convert the statutory discretion into a positive common law duty to exercise it for the benefit of the public or one of its members. This is so even in those cases where mandamus will lie to compel the performance of the public duty to give proper consideration to whether a public authority should exercise a power[40]. Mandamus lies for breach of a duty owed to the public. Any person with a sufficient interest in the performance of the duty may bring an action for mandamus requiring that the public authority comply with the conduct that is the subject of the duty. But common law duties are owed to individuals. Unless the proper inference from the statute is that an individual has "a personal right to the due observance of the conduct, and consequently a personal right to sue for damages if he be injured by a contravention"[41], breach of the statutory duty does not sound in damages.
[40] Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 465 per Mason J; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 35 [82] per McHugh J.
[41]Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 404 per Kitto J, Owen J agreeing.
Despite this general rule, however, cases often arise where the failure to exercise a power will constitute a breach of a common law duty of care that a public authority independently owes to an individual. If a duty of care exists, discharging the duty may require the authority to exercise the power "to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger"[42]. But it invites error to think that the common law has converted the discretionary statutory power into an affirmative duty to exercise the power. The common law cannot interfere with the exercise of the discretion and require the authority to enforce the power. To attempt to do so would bring the common law into conflict with the legislative intention that the exercise of the power be discretionary. The common law avoids the conflict by holding that in the circumstances the failure to exercise the power is a breach of a common law duty existing independently of the statute. The common law duty may or may not be an affirmative duty to take reasonable care to protect the plaintiff from harm. However, the existence of the statutory power does not create the common law duty although in some cases – particularly in reliance cases – it may be an important factor in finding that a duty of care was owed.
[42] Brodie v Singleton Shire Council (2001) 206 CLR 512 at 559 [102] per Gaudron, McHugh and Gummow JJ.
Ordinarily, the common law does not impose a duty of care on a person to protect another from the risk of harm unless that person has created the risk. And public authorities are in no different position. A public authority has no duty to take reasonable care to protect other persons merely because the legislature has invested it with a power whose exercise could prevent harm to those persons. Thus, in most cases, a public authority will not be in breach of a common law duty by failing to exercise a discretionary power that is vested in it for the benefit of the general public[43]. But if the authority has used its powers to intervene in a field of activity and increased the risk of harm to persons, it will ordinarily come under a duty of care[44]. So also, if it knows or ought to know that a member of the public relies on it to exercise its power to protect his or her interests, the common law may impose a duty of care on the authority[45]. If the authority comes under a duty of care, the failure of the authority to exercise a discretionary statutory power may give rise to a breach of the common law duty of care. But subject to these exceptions, ordinarily the common law will not impose an affirmative duty of care on an authority which would have the result that a failure to exercise a statutory power constitutes a breach of that duty.
[43]Stovin v Wise [1996] 1 AC 923 at 957 per Lord Hoffmann, Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreeing.
[44]Knightley v Johns [1982] 1 WLR 349 at 357-358 per Stephenson LJ, Dunn LJ and Sir David Cairns agreeing; [1982] 1 All ER 851 at 857-858]; Marshall v Osmond [1983] QB 1034 at 1038 per Sir John Donaldson MR, Dillon LJ and Sir Denys Buckley agreeing; Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 460 per Mason J; Capital & Counties Plc v Hampshire County Council [1997] QB 1004 at 1031, 1042.
[45] Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 461 per Mason J.
The likelihood of the common law imposing an affirmative duty of care whose content may require the exercise of a statutory power increases where the power is invested to protect the community from a particular risk and the authority is aware of a specific risk to a specific individual. If the legislature has invested the power for the purpose of protecting the community, it obviously intends that the power should be exercised in appropriate circumstances[46]. If the authority is aware of a situation that calls for the protection of an individual from a particular risk, the common law may impose a duty of care. In that situation, failure to exercise the power may constitute negligence. This seems the best explanation of Pyrenees Shire Council v Day[47] where the majority of the Court held that a Council which knew of a fire risk owed a duty of care and breached it by not exercising its powers. Kirby J said[48]:
"The statutory power in question is not simply another of the multitude of powers conferred upon local authorities such as the Shire. It is a power addressed to the special risk of fire which, of its nature, can imperil identifiable life and property. Therefore, the nature of the power enlivens particular attention to its exercise and to the proper performance of a decision whether to give effect to it or not."
[46] Stovin v Wise [1996] AC 923 at 953 per Lord Hoffmann, Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreeing.
[47] (1998) 192 CLR 330.
[48] (1998) 192 CLR 330 at 423 [252].
Similarly, in Brodie v Singleton Shire Council[49], Gaudron, Gummow JJ and I said that:
"on occasions, the powers vested by statute in a public authority may give it such a significant and special measure of control over the safety of the person or property of citizens as to impose upon the authority a duty of care. This may oblige the particular authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger. In this regard, the factor of control is of fundamental importance[50]."
[49] (2001) 206 CLR 512 at 559 [102].
[50] Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551-552.
Where a plaintiff claims that a public authority owed him or her an affirmative duty of care in a situation that has not yet been recognised by the common law, the court must examine a number of matters to determine whether the duty existed. I pointed to these matters in Crimmins v Stevedoring Industry Finance Committee[51]:
.Would a reasonable public authority reasonably foresee that its act or omission, including a failure to exercise its statutory powers, might result in injury to the plaintiff or his or her interests?
.Was the authority in a position of control and did it have the power to control the situation that brought about the harm to the injured person?
.Was the injured person or his or her interests vulnerable in the sense that the injured person could not reasonably be expected to adequately safeguard himself or herself or those interests from harm?
.Did the public authority know, or ought it to have known, of an existing risk of harm to the plaintiff or, in some cases, to a specific class of persons who included the plaintiff (rather than a risk to the general public)?
.Would the imposition of the duty of care impose liability with respect to the defendant's exercise of "core policy-making" or "quasi-legislative" functions?
.Is there any supervening policy reason that denies the existence of a duty of care?
[51] (1999) 200 CLR 1 at 39 [93]. cf Todd, "Liability in Tort of Public Bodies", in Mullany & Linden (eds), Torts Tomorrow – A Tribute to John Fleming (1998) 36 at 55.
If the first four of these questions are answered in the affirmative and the fifth and sixth questions in the negative, the court will ordinarily hold that the authority owed a duty of care to the plaintiff[52]. Conversely, if any of the first four questions are answered in the negative or either of the fifth and sixth questions are answered in the affirmative, ordinarily no duty of care will arise.
[52] Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 39 [94] per McHugh J.
Reasonable foreseeability
The first question in these appeals is whether the Council or the State should have reasonably foreseen that a failure to exercise its statutory powers might result in harm to oyster consumers by reason of the faecal contamination of oysters. If that question is answered in favour of the Council or the State, no duty of care existed. It would then be unnecessary to examine other features of the case to see if they pointed to a duty of care owed by the State or the Council to the plaintiff. In this and other cases, it is somewhat artificial to separate the issue of reasonable foreseeability from the issue whether the persons affected − oyster consumers − were so closely and directly affected by the conduct of the State or Council that either, or both, of them should have had the oyster consumers in mind when considering to act or not to act. However, in this case, the two issues seem sufficiently separate to warrant separate treatment.
Mr Ryan also drew the attention of the Court to the Clean Waters Act 1970 (NSW). Section 27 of that Act conferred upon the Council power to do such things, and to take such action as might be necessary to remove, disperse, destroy, or mitigate pollution, and to enter and inspect places and premises at the expense of a person responsible at that person's expense.
Mr Ryan's submission
Mr Ryan's submission is that there is no doubt that the Council did have statutory power to protect him and other consumers of oysters: the fact that the Council's powers are not expressed to be duties should not be fatal to his claim. As to the nature and purpose of the powers of the Council, he draws attention to s 7 of the Local Act, from which the true legislative purposes may be inferred. These, together with the powers granted by the interconnected provisions of that Act and other legislation, amount not only to a formidable array of power, but also a duty to exercise that power. So to hold would not, it is argued, be to produce an incompatibility with other functions and powers of the Council: nor would recognition of a duty of care in these circumstances distort the law or impinge upon the exercise of other statutory powers. Mr Ryan further argues that the class to which he belongs is not an indeterminate one, that its members can be clearly identified, and that it is a class for whose benefit it should be accepted the Council would, and should exercise its powers. The exercise of the relevant powers would not involve the taking of legislative, or quasi-legislative steps, and would not relate to a "core-policy"[273] function. Mr Ryan made the further point that the injury that he suffered was physical injury, and not pure economic loss, towards the former of which the law has more consistently been tender than the latter. The Council had a large measure of control over the situation, that is to say the state of sanitary containment in the area of the Council. Consumers were particularly vulnerable and had little or no means of self-protection against contaminated oysters.
[273]See Mason J in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 469. See also McHugh J in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 393 [180].
Mr Ryan's submission which I have summarized adopts much of the language and some of the tests which have been formulated by various justices of this Court in other cases.
However, as will also appear, the tests have not commanded unanimous support, and the situations in which their application has been considered may all be distinguished from one another.
The tests for liability of statutory authorities
As long ago as 1880 Earl Cairns LC said this:[274]
"[t]here may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so."
It may, with respect, be doubted whether it is possible to make a more accurate or better statement in relation to the powers and obligations of a statutory authority. Another way of expressing his Lordship's view is to say that there has to be something either unique (as it was in Crimmins[275] case) or special about the role, or involvement of the authority, or the relationship between it and the affected person, or special about the non-exercise of the power such as marked irrationality in abstention from employing it[276], before liability may be sheeted home to the former[277]. It is of course understandable that courts should strive to find and state a principle capable of universal application, but so far such a principle has remained just as elusive as has any alternative formula to "beyond reasonable doubt" in criminal cases, although from time to time various opinions have held sway. The test propounded by Mason J in Sutherland Shire Council v Heyman[278], of general reliance which I would read to be little different from that stated by Deane J in that case, enjoyed a considerable amount of support. It was adopted and applied by McHugh JA in the Court of Appeal in New South Wales in Lutz,[279] and restated by his Honour in the High Court in Pyrenees[280] albeit with some qualifications. But Pyrenees also sounded its demise on its express disapproval by three of the Justices, Brennan CJ[281], Gummow[282] and Kirby JJ[283]. The Chief Justice in that case was influenced by the speech of Lord Hoffmann (with whom Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreed) in Stovin v Wise[284], which had been decided shortly before the Court was called upon to reconsider what had been said by Mason J in Sutherland. Lord Hoffmann said[285]:
"In the case of a mere statutory power, there is the further point that the legislature has chosen to confer a discretion rather than create a duty. Of course there may be cases in which Parliament has chosen to confer a power because the subject matter did not permit a duty to be stated with sufficient precision. It may nevertheless have contemplated that in circumstances in which it would be irrational not to exercise the power, a person who suffered loss because it had not been exercised, or not properly exercised, would be entitled to compensation. I therefore do not say that a statutory 'may' can never give rise to a common law duty of care. I prefer to leave open the question of whether the Anns case[286] was wrong to create any exception to Lord Romer's statement of principle in the East Suffolk case[287] and I shall go on to consider the circumstances (such as 'general reliance') in which it has been suggested that such a duty might arise. But the fact that Parliament has conferred a discretion must be some indication that the policy of the act conferring the power was not to create a right to compensation. The need to have regard to the policy of the statute therefore means that exceptions will be rare.
In summary, therefore, I think that the minimum preconditions for basing a duty of care upon the existence of a statutory power, if it can be done at all, are, first, that it would in the circumstances have been irrational not to have exercised the power, so that there was in effect a public law duty to act, and secondly, that there are exceptional grounds for holding that the policy of the statute requires compensation to be paid to persons who suffer loss because the power was not exercised."
[274]Julius v Lord Bishop of Oxford (1880) 5 App Cas 214 at 222‑223.
[275]Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1.
[276]See Lord Hoffmann in Stovin v Wise [1996] AC 923 at 954.
[277]Compare the need to find a special relationship discussed in Annetts v Australian Stations Pty Ltd (2002) 76 ALJR 1348 at 1407 [324]; 191 ALR 449 at 531 per Callinan J citing Barwick CJ in Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 at 569-570 and Jaensch v Coffey (1984) 155 CLR 549 at 583 per Deane J.
[278](1985) 157 CLR 424 at 461-464.
[279]Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 328‑331.
[280]Pyrenees Shire Council v Day (1998) 192 CLR 330 at 369-371 [103]-[110].
[281](1998) 192 CLR 330 at 344 [20].
[282]Gummow J compared it with the test of legitimate expectation but criticised it as a legal fiction, anachronistic on that account, and therefore discordant with a modern preference for substance. So far, however, "legitimate expectation" appears to have survived as a test: see Sanders v Snell (1998) 196 CLR 329 at 347-348 [45].
[283](1998) 192 CLR 330 at 411 [231].
[284][1996] AC 923.
[285]Stovin v Wise [1996] AC 923 at 953, cited in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 345 [21] per Brennan CJ.
[286]Anns v Merton London Borough Council [1978] AC 728.
[287]East Suffolk Rivers Catchment Board v Kent [1941] AC 74.
Another test altogether, and indeed a potentially far-reaching one, was stated by Gibbs CJ in Sutherland. His Honour said[288]:
"Once it is accepted, as it must be, that the ordinary principles of the law of negligence apply to public authorities, it follows that they are liable for damage caused by a negligent failure to act when they are under a duty to act, or for a negligent failure to consider whether to exercise a power conferred on them with the intention that it should be exercised if and when the public interest requires it."
[288]Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 445.
Only Wilson J agreed with the Chief Justice in Sutherland, and the statement that I have just quoted has not been adopted or applied in this Court since Sutherland.
In Pyrenees, Kirby J was attracted to a third test which involved three stages and which had been expressed and applied by the House of Lords in Caparo Industries Plc v Dickman[289]. It involves the asking of three questions, as to foreseeability, relationship, and what should be regarded as fair, just and reasonable in the circumstances. His Honour was the only Justice to embrace that test in Pyrenees, and it has been expressly rejected in this country subsequently in Perre v Apand Pty Ltd[290].
[289][1990] 2 AC 605.
[290](1999) 198 CLR 180 at 193-194 [9] per Gleeson CJ, 210-212 [77]-[82] per McHugh J.
I will put to one side for the time being the decision of this Court in Crimmins[291] and go to the more recent case of Brodie v Singleton Shire Council[292] in which this Court effectively abolished the distinction between nonfeasance and misfeasance on the part of road authorities upon which the "highway rule" was based. There, Gaudron, McHugh and Gummow JJ in adopting a test of control, said this[293]:
"The decisions of this Court in Sutherland Shire Council v Heyman[294], Pyrenees Shire Council v Day[295], Romeo v Conservation Commission (NT)[296] and Crimmins v Stevedoring Industry Finance Committee[297] are important for this litigation. Whatever may be the general significance today in tort law of the distinction between misfeasance and non-feasance, it has become more clearly understood that, on occasions, the powers vested by statute in a public authority may give it such a significant and special measure of control over the safety of the person or property of citizens as to impose upon the authority a duty of care. This may oblige the particular authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger. In this regard, the factor of control is of fundamental importance[298].
It is often the case that statutory bodies which are alleged to have been negligent because they failed to exercise statutory powers have no control over the source of the risk of harm to those who suffer injury. Authorities having the control of highways are in a different position. They have physical control over the object or structure which is the source of the risk of harm. This places highway authorities in a category apart from other recipients of statutory powers."
[291]Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1.
[292](2001) 206 CLR 512.
[293]Brodie v Singleton Shire Council (2001) 206 CLR 512 at 558‑559 [102]-[103].
[294](1985) 157 CLR 424. See also Northern Territory v Mengel (1995) 185 CLR 307 at 352-353, 359-360, 373.
[295](1998) 192 CLR 330.
[296](1998) 192 CLR 431.
[297](1999) 200 CLR 1.
[298]Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551-552.
Their Honours did not see the possibility that courts might be called upon to examine the allocation of resources by a highway authority as reason to maintain the highway rule[299]. The formulation which their Honours adopted is set out in the following paragraph[300]:
"The duty which arises under the common law of Australia may now be considered. Authorities having statutory powers of the nature of those conferred by the LG Act upon the present respondents to design or construct roads, or carry out works or repairs upon them, are obliged to take reasonable care that their exercise of or failure to exercise those powers does not create a foreseeable risk of harm to a class of persons (road users) which includes the plaintiff. Where the state of a roadway, whether from design, construction, works or non-repair, poses a risk to that class of persons, then, to discharge its duty of care, an authority with power to remedy the risk is obliged to take reasonable steps by the exercise of its powers within a reasonable time to address the risk. If the risk be unknown to the authority or latent and only discoverable by inspection, then to discharge its duty of care an authority having power to inspect is obliged to take reasonable steps to ascertain the existence of latent dangers which might reasonably be suspected to exist."
[299]Brodie v Singleton Shire Council (2001) 206 CLR 512 at 560 [105]-[106] and especially at 580-581 [162].
[300]Brodie v Singleton Shire Council (2001) 206 CLR 512 at 577 [150].
Although Hayne J was also in favour of the abolition of the highway rule, his Honour's formulation of the duty of care to replace it was somewhat different from the formulation in the joint judgment. In a passage which resonates with the statement of Earl Cairns LC and the speech of Lord Hoffmann that I earlier quoted, his Honour said this[301]:
"Rather, reference must be made[302] to 'the nature, scope and terms of the statute, including the nature of the evil against which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation' (emphasis added). Ordinarily, the more general the statutory duty and the wider the class of persons in the community who it may be expected will derive benefit from its performance, the less likely is it that the statute can be construed as conferring an individual right of action for damages for its non-performance. In particular, a statutory provision giving care, control and management of some piece of infrastructure basic to modern society, like roads, is an unpromising start for a contention that, properly understood, the statute is to be construed as providing for a private right of action."
[301]Brodie v Singleton Shire Council (2001) 206 CLR 512 at 633‑634 [326].
[302]Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 405.
Crimmins does, I think, stand apart from the other cases to which I have referred. Whilst it was a case in which the Court effectively treated powers and functions as giving rise to duties of care, the factual and statutory contexts were both very special. What distinguished the powers and functions there was that if they were not in fact exercised, then the industry which was a uniquely organized one, would hardly have been able to function at all, or with any degree of efficiency[303].
[303]Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 113-114 [343]-[345], 115 [351] and in particular 115 [353].
The most recent case which has some bearing upon this one is Modbury Triangle Shopping Centre Pty Ltd v Anzil[304]. Its relevance lies in the Court's reluctance, and ultimate refusal there, to impose upon an occupier, a duty to take reasonable care to prevent harm inflicted by the criminal behaviour of a third party. It is not without significance in these appeals, that almost certainly those persons within the area of the Council who failed to prevent the run-off of faecal effluent were guilty of offences against regulations or enactments, as indeed may the Council itself have been in respect of areas which it occupied. However, as to these, a caravan park and other public areas it cannot be established that they alone, or at all, were the source of the faecal matter which caused the contamination and illness.
[304](2000) 205 CLR 254.
In my opinion, the authorities to which I have referred do not stand for one clear test which is applicable to this case. Even though the Council here did have some measure of control of the land, and the management of waste on it in its area, it was not in the same position as a highway authority. The reasoning of the three Justices responsible for the joint judgment in Brodie[305] depends in part at least upon the fact that highway authorities stand in a different position from other authorities in that they have actual physical control and occupation of the dedicated road area the source of the risk of harm. In that sense they are in a similar position to occupiers and in a category apart from other recipients of statutory power.
[305]Brodie v Singleton Shire Council (2001) 206 CLR 512 at 559 [103] per Gaudron, McHugh and Gummow JJ.
Statement of the principle
I return to where I started in this section of my reasons, to the statement of Earl Cairns LC which requires that there be something in all of the circumstances, including of course the terms of the conferral of the powers, which requires that the power be coupled with a duty; or, as Hayne J put it in Brodie, "[something in] the whole range of circumstances relevant upon a question of statutory interpretation"[306]; or as Lord Hoffmann put it in Stovin v Wise, irrationality in an abstention from exercising the power[307] or some other exceptional matter, or indicator of an intention to permit a person to sue. Unless these conditions are satisfied, in my opinion no relevant duty of care will arise.
[306](2001) 206 CLR 512 at 633 [326].
[307][1996] AC 923 at 954.
True it may be, that vulnerability, power, control, generality or particularity of the class, the resources of, and demands upon the authority, may each be, in a given case, a relevant circumstance, but none should, I think, of itself be decisive. Nor do I think it convenient or satisfactory to pose a test whether a particular function of an authority involves a core, or a non-core function, or relates to a matter of policy or executive action[308]. Not the only problem about such a test is the inevitable difficulty of distinguishing functions, and the need for statutory authorities to make a political assessment of priorities.
[308]Gummow J rejected such a distinction in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 393-394 [180]-[182].
In my opinion, no better test can be stated than that of Earl Cairns LC modified to take account of Lord Hoffmann's opinion as to irrationality of abstention from exercise, or other exceptional circumstance, and which in form only, but not in substance I would regard as being similar to that of Hayne J in Brodie. It was, it may also be observed, a test which quite clearly appealed to Brennan J in Sutherland as appears from his Honour's citation of it in that case.
The liability of the State
Applying the test to which I have just referred, I would conclude that the State is not liable. There had been no previous serious outbreak of Hepatitis A as a result of faecal contamination of the waters of the lake. There was a management council in place which had been supported by both the Council and State which, not unreasonably, could be expected to ensure that the industry regulated itself in a way that not only would protect the public as oyster consumers, but also would, in the interests of oyster growers and suppliers themselves, take steps to maintain control of quality and purity. There seems to be no suggestion that the rainfall in November 1996 was unprecedented. What I have just said also bears upon the submission that the State should have exercised its power under s 189 of the Fisheries Management Act to close the oyster fishery in the lake for a longer period than the growers themselves did. The absence of previous outbreaks, and the apparently satisfactory nature of what had been done in the past provides an answer to this. I do not think that in the circumstances, that elsewhere, and on other occasions, for instance the infectious contamination had occurred in the Tweed River in 1989 to 1990, meant that the State should have adopted further measures and caused the fishery to be closed for longer than it was. That might mean that an outbreak in the lake was foreseeable, but foreseeability alone is not enough to establish liability. It is an overstatement in my opinion to say, as the primary judge did, that the involvement of the State in the management of the fishery was so extensive that it gave rise to a duty of care to oyster consumers. His Honour the primary judge dwelt at some length on the need for regular sanitary surveys. No doubt these were highly desirable. But with all due respect, they were not the answer, although they might have been the first step in providing it. Their particular utility would lie only when effect was given to them by the taking of all necessary steps to abate the potential sources of contamination which they revealed. Such a process, however desirable it might be, would require time, money, labour, other resources, and possibly the deferral of other highly desirable measures. The State, furthermore, was not in the position of a highway authority having actual physical control of the land from which the effluent was released.
It follows that I do not think that there is any particular circumstance in this case which gives rise to a duty of care, a breach of which by the State would entitle an infected oyster consumer such as Mr Ryan to sue it. I do not overlook such important features as that the State did have and exercised a measure of control over the industry, that a matter of public health was involved, and that an oyster consumer is vulnerable and without any personal means whatsoever of guarding against a contaminated oyster. These are all relevant considerations. But they are not unique ones. Daily, agencies of the State and local authorities are concerned with issues of public health. In practical terms it would be impossible for any authority to police all potential sources of dangerous food just as it would be for such an agency to identify and eradicate all potential sources of danger of any kind. What distinguished the source of danger in Pyrenees is not present here: its precise identification by the Council and inadequate attempts by it to remove it. The massive obligation of the State to which a contrary view would give rise is a relevant and important circumstance to which I should have regard, and which, although not decisive, weighs in the balance. In abstaining from doing more than it did the State was not, in my opinion, acting irrationally.
In truth, Mr Ryan did not belong to a particular class of persons in the sense in which that expression has from time to time been used in the cases. All members of the community (as well, perhaps, as people overseas) except perhaps infants and those who either do not like or are allergic to oysters, are potential consumers of them. Nor can I find anything special in the conditions under which contamination of oysters may be prevented which would require the imposition of a relevant duty upon the State. I am unable therefore to couple even the extensive powers of the State here, of control over the oyster industry, with a duty to do any particular act in this case which would have prevented Mr Ryan from contracting Hepatitis A from the contaminated oysters.
It follows that I would disallow Mr Ryan's appeal so far as it affects the liability of the State and I would uphold the appeal of the latter.
The liability of the Council
For the purposes of this case I am unable to distinguish in any significant way between the State and the Council. In form only, rather than in substance (with three exceptions only) their powers were much the same. The first two exceptions are that the State could have been a great deal more interventionist in the management of the oyster fishery had it wished, and it did have the power of closure. However, had the Council brought to the attention of both the participants in the industry and the public, facts which it knew as well as the State, as to the sources of potential contamination, and the risks to which they gave rise, the practical consequence would probably have been the same, that oysters from the lake would not have been consumed by members of the public until their quality could be reasonably assured. It is correct, as Kiefel J put it in the Full Court there was no doubt much that the Council could have done. The third exception is that unlike however in the case of the State, there was no statutory provision which had as its particular purpose the possible management of the industry or the prevention of contamination of oysters. There was no direct and active involvement by the Council in the control of the industry in anything like the same way as the Council involved itself in the attempt to eradicate the potential source of a fire in Pyrenees. Asking the same questions and applying the same test as I have in relation to the State, I conclude that the Council is not liable. The disposition of the appeals involving the Council should result in its not being held liable to Mr Ryan.
The liability of Barclay
The law so far as the liability of Barclay is concerned is well settled. It was obliged to take reasonable care for the safety of persons who consumed its oysters. So much was conceded by Barclay. Bearing upon that matter are these facts: of most importance that Barclay was carrying on a commercial activity in the cultivation and sale of oysters, that Barclay was not only obliged to have, but also had a great deal of knowledge about the cultivation and harvesting of oysters, and in particular of the potential for infection after heavy rain; that oysters were susceptible to faecal contamination; and that there were numerous potential sources of such contamination in the catchment of the lake. Useful measures were available and had been adopted by Barclay but they could provide no complete defence against Hepatitis A infection.
The trial judge made a finding that Barclay could have made a significant contribution to the reduction of risk by causing an inspection to be made of the foreshores of the lake. Barclay was armed with the knowledge of outbreaks of Hepatitis A on other occasions in other places. Hepatitis A is a particularly unpleasant and dangerous illness. By a combination of inspections (as held by the primary judge) and a suspension of harvesting for longer than a few days, the risk might have significantly been reduced. As grower and supplier for profit, Barclay could and should be expected to provide safe oysters. These matters led the trial judge to make what was essentially a finding of fact, that in failing to adopt those measures Barclay was in breach of its duty of care to Mr Ryan.
I might not perhaps have reached the same conclusion myself. As Starke J pointed out in Australian Knitting Mills v Grant[309] untoward results or accidents cannot with the greatest of care be wholly eliminated in any industrial process, an observation which could be made with at least equal force to a process of production of natural products. There were however facts upon which his Honour was entitled to reach the conclusion as to the liability of Barclay that he did. There are now concurrent findings of fact to a similar effect by two judges of the Full Court. Notwithstanding therefore the evidence of an absence of any previous outbreak by reason of contaminated oysters from Wallis Lake, and Barclay's incapacity itself to remove the sources of contamination, relevant factors which Lindgren J in dissent thought decisive, I am not prepared to depart from the holding of negligence against Barclay by the primary judge and the majority in the Full Court.
[309](1933) 50 CLR 387 at 410.
The consequence of my decision is that both Barclay companies should be solely liable for Mr Ryan's loss and damage in negligence and with respect to costs. Barclay Oysters Pty Ltd has also been held to be liable, an unchallenged holding, to Mr Ryan for breaches of ss 74B and 74D of the Trade Practices Act in respect of those and the claim in negligence he will in due course be obliged to elect.
Disposition of the appeals
The judgment and orders of the Full Court of the Federal Court should be quashed and judgment and orders as follows substituted:
1. Judgment be entered in favour of Mr Ryan in the sum of $25,000 with interest of $2,000 against Graham Barclay Oysters Pty Ltd and Graham Barclay Distributors Pty Ltd ("Barclays");
2. Order that Barclays pay Mr Ryan's costs of the trial, and the appeals to the Full Court of the Federal Court and this Court confined to the litigation of the issues between them;
3. Order that Mr Ryan pay the costs of the State of New South Wales and the Great Lakes Council, of the trial, the appeals to the Full Court of the Federal Court and this Court;
4. Order that Barclays pay to Mr Ryan a sum equal to the additional costs incurred by him by reason of the litigation of issues arising solely between Barclays and the State and the Council or any of them inter se, at and of the trial, the appeal to the Full Court of the Federal Court and this Court; and
5. Order that the matter be remitted to the primary judge for the trial of any outstanding issues and disposition of the action.
Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54
Daralievski v Tac & Anor No. DCCIV-02-723 [2003] SADC 30
208
11
0